Business use (or not) of Intellectual Property Rights protection

There is a new report out from the National Science Foundation (NSF) on “Business Use of Intellectual Property Protection Documented in NSF Survey“. This InfoBrief looks at data collected in the NSF/Census 2009 Business R&D and Innovation Survey (BRDIS). Taken at an aggregate level, the report is somewhat surprising. Only 5% of businesses say that utility patents are either very or somewhat important. Only 12% said copyrights were very or somewhat important. Only 14% said trade secrets and only 15% said trademarks were very or somewhat important. In other works, 85% of U.S. businesses don’t think trade secrets are important and 96% don’t think patents are important.
But, once you start getting into the details, at least some of this begins to make sense. Certain industries believe certain types of intellectual property rights (IPR) are of importance. Copyright in the publishing industry is an obvious example. A not-so-obvious examples is that, according to the report, “98% of businesses in the semiconductor machinery industry (NAICS 333295) reported trade secrets as important–no other NAICS industry reported a higher share of any type of IPR as important.” One would think patents rather than trade secrets would be of key importance.
The difference is also stark when it comes to business who conduct R&D and those who do not (self-defined). Not surprising, those who say they do not undertake R&D overwhelming rate IPR as not important. On the other side, however, only about half of those businesses that do have R&D activities rate some form of IPR as very or somewhat important.
A couple of questions jump out at me from the survey. First is the most obvious. Do companies really understand intellectual property?
But thinking about it more, another question emerges. In the text is this note: “Only about 3% of the estimated 1.9 million for-profit companies represented in the survey performed and/or funded R&D in 2008.” So the issue is not necessarily IPR. Regardless of whether they utilize IPR or not, do companies understand that they are selling knowledge? They may very well understand this point and we have failed to capture that understanding. The long standing problem here is that many companies are creating and selling knowledge that is outside of the traditional definition of R&D.
So, maybe some of these companies get it — that their intellectual capital/intangible assets are more important than their formal IP. Maybe IPR is not as important as we think. Or maybe the companies are just clueless.
Obviously, more needs to be done before we can understand what is going on here.

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